A Review of the Nigerian Energy Industry

Integrated power plants outside our control – NERC

02 June 2015, Abuja – The 10 National Integrated Power Projects constructed by the Federal Government were built outside the stipulated regulatory framework, the Nigerian Electricity Regulatory Commission has said.

Sam-Amadi, NERC
Sam-Amadi, NERC

According to NERC, most investments made in the power sector in the past were done outside its regulatory control, a development that may have resulted in the huge sums invested in the industry without commensurate improvement in electricity supply.

The Chairman/Chief Executive Officer, NERC, Dr. Sam Amadi, specifically stated that one of those projects outside the commission’s control was the construction of the 10 NIPP plants.

Amadi spoke briefly on Monday during a call-in a radio programme on Raypower, which was monitored by our correspondent in Abuja.

The NIPP was conceived in 2004 as a fast-track initiative to add significant new generation capacity to Nigeria’s electricity supply industry. The generation plants were accompanied by supporting transmission, distribution and gas transport infrastructure projects.

While responding to a question on the statement by President Muhammadu Buhari that the about $20bn investments in the power sector had not brought commensurate electricity supply to the country, the NERC boss stated that although he could not state the actual figures invested in the sector, most of the invested sums were done outside the commission’s control.

He said, “But the beauty of where we are now is that apart from government projects, every project coming into the sector passes through a prudent regulator. In the past, there were investments that were either irrelevant, corrupt, lacked discipline, or were stranded assets that were not networked to produce power.

“Up until now, or just in the recent past, we didn’t have the control over government projects. I’ll give you an example, the NIPPs. Some people have the feeling that the NIPPs are too expensive or so much was spent building them. Now, as a regulator, those projects were built outside the regulatory framework.

“So, there’s no way we can determine whether they were prudent or not. What I am saying is that the $20bn, whether it is commensurate or not, came up over a period of time when NERC was not there.”

Amadi, however, expressed optimism that with the quantum of electricity expected from the NIPPs as well as the power that would be generated from renewable energy sources and coal, the country would be able to hit 31,000 megawatts.

He was careful not to state when this could be realised.

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